Skip to main content

Two observations on the coming demise of MIND, the catchy ticker symbol for the Horizons Active A.I. Global Equity ETF (MIND-T).

One is that while artificial intelligence may one day supplant human portfolio managers, we are a long way from that right now. The other is that investors don’t seem ready to leap into a fund where the portfolio is built using algorithms to find the best opportunities. With assets sitting at just $3.4-million, MIND will be delisted from the Toronto Stock Exchange on May 17.

MIND was introduced with some fanfare in 2017 as a global equity exchange-traded fund holding underlying country-specific or regional ETFs chosen on the basis of factors such as money flow, six-month relative performance, 90-day volatility, beta and 80-day simple moving average. As shown today, the MIND portfolio’s top holdings include funds tracking the stock markets of Australia, China, Canada, the United States, Germany and Britain, plus a pair of individual stocks – Newmont Corp. (NGT-T) and Lockheed Martin Corp (LMT-N).

Global stock markets were generally red hot in recent years, but MIND lost 15.7 per cent in the past 12 months and an annualized 1.6 per cent over the past three years.

Mark Noble, executive vice-president of ETF strategy at Horizons ETFs, said the fund is being closed because it’s too small to justify keeping it around. “We didn’t see it having much appeal for investors on a go-forward basis,” he said.

The fund was originally configured as a way to add value to index investing by identifying the global indexes with the most potential for gains. “It was an experiment in trying to build a better kind of index,” Mr. Noble said. “The moral is that investing in indexes themselves remains the most efficient way to get exposure to the market.”

MIND’s mandate was adjusted a while back to allow it to buy individual stocks as well as index ETFs, but the fund never rose above a modest $15-million or so in assets. Fees may also be a factor here – the management expense ratio is currently listed at 1.01 per cent. MERs for those individual index ETFs used by MIND come as cheap as 0.04 per cent for Horizons’ own S&P/TSX 60 Index ETF (HXT-T).

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Report an error

Editorial code of conduct

Tickers mentioned in this story